Express Scripts announced that it is introducing a novel formulary to provide employers and health plans a better opportunity to leverage changing dynamics to help lower their members’ out-of-pocket costs. The Express Scripts’ National Preferred Flex Formulary, available January 1, 2019, provides a way for plans to cover lower list price products, such as new authorized alternatives that drug makers are bringing to the market, and reduce reliance on rebated brand products.

“Some manufacturers have already followed our lead to create a pathway to help close the ‘gross-to-net bubble,’ and give cash-paying patients immediate access to more affordable medicine in a way that will not destabilize the drug supply chain,” said Steve Miller, M.D., CMO, Express Scripts. “Our new National Preferred Flex Formulary demonstrates our flexibility to keep clients ahead of industry trends, so that they can fully leverage new opportunities to lower their prescription drug costs.”

Authorized Alternatives

Drug makers set drug prices, and can lower them at any time. However, immediate list price decreases for products already on the market can pose challenges for employers and health plans that already have underwritten plan offerings and benefit designs for upcoming years based on existing economics.

By introducing authorized alternative products, through a new or additional National Drug Code (NDC) with a lower list price, we can create a competitive dynamic more similar to a generic coming to market. Cash-paying patients can have immediate access to the lower-priced medication. Meanwhile, employers and health plans can choose which product to cover that is best for their plan and their members: the lower-priced option or the original brand, which may have a rebate.

Over time, plans, pharmacies, and others in the supply chain can transition to a new pricing model and the drug maker could ultimately retire their high list price product.

National Preferred Flex Formulary

The National Preferred Flex Formulary is a comprehensive formulary that will mirror our industry leading National Preferred Formulary—covering more than 3,800 brand and generic medications—and will follow Express Scripts’ clinical-first formulary decision process for all new therapies that come to market.

• When a manufacturer launches a lower-cost authorized alternative to a branded medication currently on the market, Express Scripts will evaluate the product for placement on the National Preferred Flex Formulary.
• If appropriate, the authorized alternative product will be added to the Flex formulary with preferred or possibly non-preferred status. The innovator brand-name product, and potentially other products in the therapy class, then will be excluded from coverage.
• Members enrolled in the Flex formulary who have a high-deductible or co-insurance plan design can have immediate access to the lower-priced authorized alternative medication.

Branded innovator products will remain preferred or non-preferred on other formularies, including Express Scripts’ National Preferred Formulary, while the authorized alternative product may be excluded.

(Source:Express Scripts)